On September 29, 2019, certain amendments to the Illinois Equal Pay Act of 2003 (“IEPA”) went in effect to better promote equal pay.

Prohibition on Salary History Inquiries

The amended law prohibits employers from requesting information about a job applicant’s current or prior salary history when making hiring decisions. Specifically, employers are prohibited from (1) screening job applicants based on their current or prior wage or salary history, including benefits or other compensation, by requiring the wage or salary history satisfy a minimum or maximum criteria; (2) requesting or requiring applicants to disclose salary history information as a condition for being interviewed, considered for employment, or offered employment; or (3) requesting or requiring an applicant disclose wage or salary history as a condition of employment. Employers are further prohibited from soliciting wage or salary history from an applicant’s current or former employer. This prohibition does not apply to applicants whose salary history is a matter of public record or to current employees applying for an internal position.

An employer may provide information about wages, benefits, compensation, or salary offered for a particular job position and discuss an applicant’s salary, benefits, or compensation expectations. While it is not a violation of the amended law for an applicant to voluntarily disclose salary history without prompting, the employer is still prohibited from considering that information as a factor in making employment or compensation decisions.

Exceptions to Pay Differentials

The amended law prohibits employers from discriminating between employees on the basis of sex or African-American race, and requires equal pay for the same or substantially similar work for jobs requiring “substantially similar skill, effort, and responsibility.”

Under the IEPA, an employer will not be held liable for pay differentials if payment is under a seniority system, a merit system, or a system that measures earnings by quantity or quality of production. The fourth exception is a catch-all defense that now requires employers to show the pay differential based on any other factor other than sex or a factor that would constitute unlawful discrimination under the Illinois Human Rights Act is “(A) not based on or derived from a differential in compensation based on sex or another protected characteristic; (B) is job-related with respect to the position and consistent with a business necessity; and (C) accounts for the differential.

Ban on Pay-Secrecy Requirements

It is now unlawful for an employer to require an employee to sign a contract or waiver that would prohibit the employee from disclosing or discussing information about the employee’s wages, salary, benefits, or other compensation. Employers may prohibit human resources employees, supervisors, or other employees with access to employees’ wage or salary information from disclosing information of other employees without their prior written consent.

Expansion of Available Damages

The amended law also expands the types and amounts of damages that are available for equal pay violations. Employers in violation of this section may be subject to (1) up to $10,000 in special damages; (2) injunctive relief; (3) compensatory damages to the extent such damages exceed the amount of special damages; and (4) reimbursement to the plaintiff for attorney’s fees and costs. The law’s five-year statute of limitations remains in effect.

Recommended Action Steps

Illinois employers should review hiring practices and train recruiters and employees responsible for interviewing candidates to ensure compliance with the ban on salary history inquiries. Compensation structures should also be reviewed to determine the reasons for pay differentials. Employers should remove all questions on employment applications requesting salary and wage history, and they should update employee handbooks, policies, and agreements to ensure employees are not prohibited from discussing compensation information with other employees.